Business succession planning
If you pass away or lose capacity, your company still has to pay salaries, settle suppliers and deal with the bank. A succession plan records who will run the company and how your shares will be dealt with.
What happens without a plan
Your shares form part of your estate. They pass under your will, or under the intestacy rules if there is no will, and cannot be transferred until a Grant of Probate or Letters of Administration is issued. This usually takes several months.
If you lose capacity and have no LPA, no one can act for you without a court order. Your company's documents may not say who can vote your shares, and bank facilities you have guaranteed may come under review.
There can be family problems too. A spouse may inherit shares in a company they have never worked in, or a co-founder may find that your heirs are now shareholders.
Questions a succession plan answers
- Who will run the company, and do they have written authority?
- Who will vote your shares while your estate is being settled?
- How will your shares be valued, and can your partners buy them?
- Where will the money for a buyout come from?
- How will personal guarantees and director's loans be handled?
- Do these arrangements match your will and nominations?
How we help
We review your shareholdings, company constitution, shareholders' agreement, guarantees and estate documents, and identify where they conflict. We then work with your lawyer and accountant, and where relevant with SimplyWills and Precepts Group, to deal with them.
The work starts with a free first meeting on Zoom or Microsoft Teams. You can use your own lawyer and accountant, and you are under no obligation to go ahead.
When to start
It is best to plan while the business is doing well and everyone is in good health. If your company has more than one shareholder, your family depends on its income, or you have personally guaranteed its borrowing, you should consider a plan now.
This page is general information for business owners in Singapore. It is not legal, tax or financial advice. Please take advice on your own documents.